FNB warns of revived scam targeting businesses

Financial services group FNB says that as small and medium enterprises (SMEs) increasingly migrate to digital channels, fraudsters have taken advantage of the opportunity to revive the old Advanced Fee Fraud (419) scam.

An advance fee or 419 scam is a form of fraud where you are promised a lot of money, goods or a job, but you first have to pay an upfront fee.

The scam dupes businesses into to:

  • (a) making upfront payments for goods and services without the intention to deliver; or
  • (b) paying sums of monies, in advance, to facilitate the payment of loans or promised funds.

Businesses being scammed

Businesses are exploited in two ways.

The fraudsters pose as legitimate suppliers who require an upfront payment before goods or services can be rendered, FNB said.

Sometimes the victim is requested to partner on an urgent/major business proposal, whereby the fraudsters request the unsuspecting business to pay a third party upfront and add the cost to the final bill.

The details provided to businesses (victim/target) may vary; however, the common element is the promise of large sums of money, making the deal attractive.

“The aim of the fraudsters is to deceive the businesses into believing that they are dealing with a reputable supplier or business associate and then part with their hard-earned cash. Although this scam has been around for some time and consumer vigilance has heightened, fraudsters have taken advantage of digital platforms to revive the scam,” said Roshan Jelal, head of fraud at FNB Commercial.

“Fraudsters mostly use email communication, vishing and falsely advertise their services online or via social media platforms in order to lure unsuspecting victims.”

Jelal said that the e-commerce boom as a result of Covid-19, coupled with the increase of digital marketplaces, has also played a key role in reviving the Advanced Fee Fraud (419) scam for businesses.

FNB called on consumers and businesses to look out for unrealistic offers and discounts, saying it is always advisable never to pay money to get money.

Interrogate requests for upfront and urgent payments – this should always be treated as a red flag,” Jelal said.

The trick is that the unsuspecting business will always receive goods or services once they pay an upfront fee to assist the supplier to deliver. Varying reasons are provided for the fee, e.g., exchange control fees, customs duty fees, bank charges and problems with delivery.

Don’t be duped by credentials – some fraudsters often go to great lengths to make their credentials legitimate.

Always go a step further to verify their information, such as getting references from clients they have serviced in the past, check the website URL and spelling mistakes, physically going to their premises to check if the business exists, as well as meeting with the suppliers or business associates in person, said Jelal.

Fraudsters can also send you a link to a fake website where you enter your financial or personal information. If you must visit a financial institution’s or a service provider’s website, type their web address into the URL rather than clicking on links.

Take precautions when choosing a supplier – sometimes fraudsters don’t approach businesses but set up traps through lucrative advertisements (often with rave reviews which is part of the elaborate scheme) for goods and services online or via social media channels. It makes it easier to be defrauded if you are the one who has approached the supplier.

“Lastly, imposters are not only after your money, but could also monetise data for identity fraud. Therefore, always ensure that your company’s private information is not disclosed to fraudsters, as well as third parties who are not entitled to receive it, or parties whose identities cannot be rightfully verified,” said Jelal.


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FNB warns of revived scam targeting businesses